Cluster Family Office Blog

Some people say that a new crack An economic crisis is looming. It is far from clear whether we are beginning to see something similar to 29 October 1929 or simplemind a widespread economic crisis that could have a more or less global impact. It is clear that the interdependence of the world’s economies and the house of cards that is the modern financial system do not help to lay solid foundations capable of withstanding global crises. In other words, some of us are beginning to recognise the dangers of the globalisation macroeconomic and the overlapping financial products, which serve no purpose other than speculation (which is no small matter). In recent years, financial engineers have created structures and products that would have been unimaginable a decade or two ago, and which are built on foundations that are themselves now far removed from the traditional real economy. Complex structures built upon complex structures.

Buying or selling an oil contract is now child’s play for any private individual, even if they’ve never seen what a barrel looks like or what’s inside it. These days, the brochure Any structured product comes with a couple of pages explaining how that product will perform over time according to various possible scenarios. Relatively simple text, graphs and mathematical formulae which, together with the explanation provided by the relevant adviser or fund manager (sometimes even competently and objectively), aim to help the buyer understand how their new financial ‘toy’ works. But this brochure o fact sheet It’s just the manual for instructions. The actual blueprints for the product never reach the end investor. They are so complex that only the product’s creators and their colleagues can make sense of them. Financial engineers, whom I affectionately like to call financos (since telecommunications engineers are known as telecoms).

The thoughts I am about to set out may not be shared by younger readers, or indeed it is quite possible that hardly any of you will agree with them. But I have come to these conclusions after 20 years of observing markets in almost every colours and to get to know the profiles of investors who are quite greys. Let me make it clear from the outset that I do not intend to teach anyone anything, nor do I claim to be above good and evil – not least because it has taken me a great deal of effort, involving learning from my mistakes, bearing the scars and spending money, to arrive at these reflections. What’s more, I would gladly settle right now for being just halfway through a certain experience. Having said that, I recommend that you read (if you haven’t already) this article by The Rebuzner in which he offers a very interesting and entertaining analysis of investors and our ego. Now that we’ve set the scene, here are some additional points to consider which most of us tend to overlook, even though they’re obvious:

In a market of RV In a bull market, almost all of us investors make a profit, and in a bear market, the opposite is true. We usually look for the key to success in maximising profits during the boom and minimising losses during the downturns. Few of us would consider stopping investing in the stock market before we’ve got our fingers, wrists and forearms badly bruised. Who is forcing us to swim against the tide when we could be standing on the shore considering other forms of investment? It is true that, in the long term, the statistics show that returns as a whole outweigh bear markets. But no one can guarantee that we will live long enough to benefit from that average. Many investors lost all their money and/or their lives before the statistics could bestow their well-deserved blessing upon them. Nevertheless, if one retains enough investment capacity and good health to see the sun rise again, one will experience a few years of abundance during which it is best to put oneself in expert hands and learn – whilst enjoying – the journey.

But most investors confuse complexity with profitability. Many believe that doing something different from everyone else will lead them to success. This may be true, for example, in the business world, as setting ourselves apart from the competition usually yields good results. But in the markets, things are different, Competition becomes our ally and the majority view will prevail in the most efficient way. It is certainly true, as our much-admired Rebuzner that many people often think they are smarter than the market as a whole. They confuse the word «investment» and believe it defines what will happen to the market trend in which they are investing their money. Why should the trend of a security, sector, etc. invert Just when we decide to put our money in the opposite direction? Why must the majority agree with us the moment we start going against the grain? Isn’t it easier to go with the market in a prudent way, with solid assets and undervalued Should you back promising young talent or go against the grain? Mind you, I’m not saying it’s more profitable, just that it’s easier and better suited to the capabilities of most investors.

Of course, buying a company with exemplary fundamentals whilst its share price is plummeting is a perfectly valid and profitable strategy, but one that is not suitable for most ordinary people. The example of the ‘golden knives’ from Rebuzner It’s very vivid. But neither financially nor emotionally are we all prepared for investments which, although highly profitable in the medium term, make life difficult for us in the short term. In Technical and Fundamental Aspects The four risk management techniques for investments are discussed value, namely:

(a) Invest only in companies whose business we understand.
(b) With low financial and operational risk.
(c) Buy below intrinsic value.
d) Always take a long-term view.

Unfortunately, none of them are within the reach of most deadly investors: Understanding of these businesses is severely limited by a lack of information, time and/or expertise; the financial and operational risk posed by these companies is unlikely to be accurately assessed unless the first condition is met; buying below intrinsic value in a bear market will require a level of nerve and foresight that is uncommon amongst most people, whilst in a bull market few will recognise that needle in the haystack amidst the lack of information; finally, the culture of quick profits and a lack of experience will mean that very few will stick to a long-term strategy.

I’m not saying that the investor value I’m certainly not wrong, as I personally feel closer to him than to the fundamentalist or the die-hard technical analyst. But for most deadly investors These methods are beyond their reach. The average investor needs to simplify their strategies to suit their circumstances. That is why, when I read or see on channels such as tv Financial advice and tips on investing in the markets make me think. How would we view doctors (or quacks) who prescribed medicines to improve health without tailoring them to each of their patients? When I see in the media: ‘Buy, sell, hold,’, overweight This or that gives me the creeps. It’s as if I were looking at a generic recipe aimed at the whole audience, along the lines of: Please take Two tablets of this or that every 8 hours to live longer and better.

I would like to reiterate that I am not questioning the profitability of all these investment strategies, but rather their accessibility and adaptability for the average person. Unfortunately, over the years I have come across countless ordinary investors who believe they can learn to be immortals. They believe there are two types of investors in the world: those who still have a lot to learn and lose money; and those who have learnt a great deal and make a fortune to infinity and beyond. They are convinced that by training hard enough and gaining experience, they will reach the rank of immortal investors, capable of making consistent profits on the stock market and infinitely. They have examples in mind such as Buffet, Soros, etc. A grave mistake. Partially aware of their limitations, they would be content with a small fraction of the fortunes mentioned (sic). But the mirrors in which they see themselves are exceptional cases that prove the rule. Unfortunately, the rules of the game are different for the deadly investor.

Pragmatism, an awareness of personal circumstances, bearing in mind that stock market cycles are not always compatible with our individual circumstances, financial situation, family situation, timing and goals that are vital for determining acceptable risks, and humility – a great deal of humility – amongst many other things that I cannot quite bring myself to list.

For those with less expertise: simplicity and focusing exclusively on bull markets, guided by good fund managers with an indisputable track record.

May God grant good fortune to the most capable…

Hello, my name is Gurus Mundi, I am a deadly investor.

The two giants of the Spanish banking sector BBVA y BSCH have announced their decision to sell off almost all their property assets over the coming months. Of course, they have dressed up this strategy to make it politically correct. On the one hand, the BBVA refers to the centralisation of resources on a dedicated campus or business park; and another BSCH is selling off assets to fund the acquisition of 27.9% of ABN Amro. This correction Politics attempts to justify to the public strategic decisions that are plain to see – at least to us. BBVA It is centralising its facilities in a business park that will be entirely versatile; in other words, unlike the situation in Boadilla del Monte, it will be possible to market and to become profitable to let or sale to any interested prospective buyer. That is why there is talk of an «open-plan» layout with horizontal buildings featuring independent units that are easy to sell on a retail basis. For its part, BSCH «needs» to raise around €19,000 million to acquire its stake in ABN, although it has in fact been recognised in petit committee that this large-scale property sale will go ahead regardless of whether the acquisition of ABN goes ahead as planned or is called off for whatever reason. Clearly, the acquisition of the Dutch group could bring its share of properties into the group, but the reality is that the decision to sell the property portfolio of BSCH goes beyond and within the scope of this operation.

Realising gains from property capital appreciation, raising liquidity to optimise assets, balance sheets and lending capacity, restructuring internal, centralisation of resources, etc… All these arguments and phrases media-related are nothing more than a smokescreen for the reallocation of assets within the banking giants. Other major players such as Telefónica are also jumping on the bandwagon, the last one being the fool. The investment The property market is no longer just a business, and large companies are making major decisions that they conveniently gloss over, but the essence of it all strikes us as very Clarita: A 180-degree shift in investment strategy. Furthermore, we find that obvious, the cycle has not only come to an end but has been milked to the full. The rental yields that these banks guarantee to potential buyers of their properties are nothing more and nothing less than market rates. And although most property owners have become accustomed to achieving net returns of 2 or 3% of the property’s value at the height of the property bubble, these figures are easily surpassed by any self-respecting banking operation. In other words, it is far more profitable for a bank to pay rents at this level and thus be able to to make profitable It is better to invest their liquid assets in alternative banking operations. Furthermore, this change of course also avoids the risk of their property values falling in the near future. It is a time for cash, and we will not tire of repeating this for as long as we believe it to be the case.

It is undeniable that, with each passing day, the rich are becoming increasingly distanced from the poor and even from the middle and upper-middle classes. Whilst it is true that wealth continues to be created from nothing or very little, the growth of established fortunes is unequivocally rising at a greater rate. One factor that may explain this widespread growth amongst the wealthy is, perhaps, their ever-increasing understanding of the economic world, but also their use of specialist advice. An increasing number of wealthy individuals are preserving and growing their assets over time by developing their own expertise and/or engaging specialist services in high-net-worth management (ffamily offices). Private banking is no longer sufficient – in fact, it never was – as the comprehensive services required by anyone with medium to high net worth quickly overwhelm any bank manager. Furthermore, their dependence on the financial institution itself renders them ethically unfit to provide wealth advice to their clients, not to mention the technical incompetence of many of them. But let us not talk about bankers; let us turn to a more pleasant subject: asset diversification for high net worth individuals, which is also applicable to those with medium-sized portfolios. We shall therefore continue our work to demonstrate in practical terms that most of the protocols designed for managing large fortunes are also highly profitable for smaller estates.

But they will never do so in markets where property prices have already risen to saturation point, let alone in property bubbles.

At this point, let us once again compare the strategic position of the middle and upper-middle classes with that of the rich: What have most Spaniards done with their spare cash in recent years? Clearly, we are not talking about those who can barely afford to pay off their own, single mortgage, but rather those who have purchased – with or without a mortgage – other properties as a «safe investment» in which to put their savings. The answer is obvious: they continue to buy more and more properties that are not prime in a property market that it is not stable far from it growing or emerging. They may now be more selective, or at best have stopped buying, but very few have adjusted their strategy in line with the radical changes that the property market and interest rates have begun to undergo.

Making money by investing in property at the height of the property boom has been a piece of cake in recent times; even the most inexperienced have made huge capital gains. The bank would finance 100% (or more) of a property at a ridiculously low interest rate, and within a few months – or even weeks – the property’s value would rise spectacularly compared to the initial investment. Nowadays, some people are already facing serious difficulties in keeping up with these mortgages, whose interest rates are no longer a laughing matter. Others are beginning to realise that they will have to carry some mortgages for longer than expected. What’s more, prices have stopped rising or are even starting to fall, with a few exceptions. prime, of course.

Faced with this situation, what are many average investors in Spain doing? Quite simply, some have stopped risking their savings on new property developments – which are now seen as highly «uncertain» – and are instead «securing» their surplus assets on the stock market… A surreal strategy if ever there was one. What’s more, almost all of them refuse to sell their properties at current market prices, arguing that prices will never fall: «For less than so much »I’m not selling, I’m in no hurry, it will always be worth more.’ They compare these figures with the asking prices found in property listings and confirm their theory that, with very few exceptions, prices do not fall but simply stop rising. It’s a pity they forget one a minor detail: They are not for sale. The opportunity cost from that point onwards is enormous. The fall in prices is a matter of time, interest rates and the prime whichever property it may be. Consequently, the ability to maintain asking prices over time will depend on the owner’s needs. In other words, buyers with more modest means, who are hardest hit by rising mortgage rates, will have to lower their asking prices sooner if they wish to sell, whilst more affluent investors will be able to keep their properties on the market at above-market prices for longer, but will pay the opportunity cost of going against the trend. However, properties that are closer to prime level will be more likely to sell at the desired price.

At this point, why don’t we adopt the strategy of HNWIs and become Medium or even Low Net Worth Individuals? From our perspective, the answer is clear: firstly, a lack of knowledge about the correct strategy for each cycle; secondly, the widespread inability to invest in fixed income through high-yield financial products tailored to our investment capacity; and thirdly, the Latin culture of windfall and the drive to create sudden wealth.

For those with average or even low net worth, their own home already more than adequately covers the appropriate proportion of property holdings for an HNWI. In other words, our investment in property should focus on paying off our own mortgage over many years, and our savings should be channelled into fixed-income and equity assets in proportion to the current economic cycle. As wealth increases, our investment horizons will broaden, seeking to maintain a strategic allocation across the four main asset classes: fixed income, property, companies/businesses and equities. This allocation should be adapted to the prevailing economic conditions at any given time.

This financial progression goes hand in hand with personal development, as defined by…Abraham Maslow began in 1943 with his famous pyramid. Company Blog He offers us a light-hearted and up-to-date analysis of this through Pau, to whom, incidentally, we would like to publicly wish a happy birthday, so that he may continue to combine sound economics with entertainment through his sharp wit. At Family Office, a few years ago we adapted this theory to the world of high-net-worth personal finance, replacing the ‘Needs for Ego and Self-Actualisation’ with ‘Public Recognition’ and ‘Philanthropy’. This is based on our experience with family office clients.

In short, as our friend said Echevarri: «You have to be able to read the stage of the match we’re at.» And I would add that we also need to have the mindset and strategy of a top-flight team without losing sight of our limitations. After all, aren’t there teams at the top with very modest budgets? Once we’ve reached a certain level, the hard part will be staying up there, just as our headline says. «So let’s start with the easy bit…»

The concept of investment is one of the most difficult economic concepts to define. The most general definition that can be given is that, through investment, there is an exchange of an immediate and certain satisfaction that is renounced, against a hope that is acquired and of which the invested good is the support.

When it comes to investment, we are faced with a fundamental problem: determining the profitability of the investment project to decide whether or not to carry it out, and also, when a list of investment alternatives is available, these can be ordered from highest to lowest profitability, with the aim of prioritise the most profitable.

There are various criteria for valuation and selection of investments, some of them are:

On the other hand, there is a clear effect of the inflation and taxes when calculating the potential return on our investment.

To take these two factors into account in the calculation of the Capital Value, the formula would be as follows:

VC= - A + ((Q1 - tQ1)/ ((1 +K)*(1 +g)) + ((Q2 - tQ2)/((1+K)^2*(1 + g)^2)) +.....+(((Qn – tQn)/((1+K)^n * (1 + g)^n)))

Where t is the tax rate and g is the expected inflation.

All these methods are deterministic. The magnitudes defining the investment problem are considered to be perfectly known. The economic reality is different. It is difficult to know the future with precision. There are methods that introduce that component of risk or probability into the formulas, which makes them even more complicated, taking into account mathematical expectation, variance, .... but I think that would be excessive theorising.

Let me start by saying that we are going to analyse certain behaviours and opinions that we have observed through our own experiences with clients and acquaintances. The reader need not necessarily identify with any of these profiles or ways of thinking. We are simply offering some reflections which, from our perspective, we find very revealing.

As our regular followers will already know, for the past few months we have been dedicating a section of our multi family office to apply our operating protocols to those with medium and even low levels of capital. Well, amongst this sector – which makes up the vast majority of the population – we have encountered a number of surprises regarding their understanding of risk and investment for their assets, compared to those with substantial fortunes. For years, we have become accustomed to the feedback The insights that high-net-worth clients provide us with regarding their views on the economy, investments and money in general, and comparisons with small and medium-sized investors, have highlighted some very significant differences in perspective. Here are some of them:
Major investors For the most part, they are open to exploring innovative options and financial creativity. Perhaps their interest in keeping up with the latest investment trends is what makes them so keen to analyse any new proposals for investing their assets. That said, they will do so meticulously: they will weigh up their options, seek advice and will scan They will, of course, examine these options in great detail until they finally make a decision. Those with a more adventurous profile will take greater risks, whilst those with an ultra-conservative profile will almost always turn down the proposal; but, in general, they will never rule out an investment option before analysing it.
But let us analyse our recent experience with investors with lower net worth: Firstly, we can highlight that both small and average investors tend to be more resigned to low returns and high tax systems. In other words, they generally rule out proposals that could optimise these two variables, essentially for two reasons: Retail investors because no one has ever taken them into account, preventing them from using the tools that are normally only available to those with greater capital. That is why such proposals, tailored to their profile, surprise and confuse them, and they do not feel capable of completing the necessary procedures to benefit from them. They tend to settle for the simplicity of investing in the stock market as the only alternative to the financial marginalisation of their modest assets. They can make these investments by través from any manager at their own bank or broker from a financial institution, including via the internet, just like someone who opens a fixed-term deposit at their local bank branch or places a bet on bwin.com, to give just one example. On the other hand, the reason why average investors tend towards such conformity; perhaps this is based more on the habit of paying progressively higher taxes during the years of economic growth and maturity. Of course, another key factor is the widespread lack of awareness and interest in financial options designed for high-net-worth clients, yet which are largely applicable to the rest of the lower-income client base.
Often, the more assets one has, the less risk one should be prepared to take. And here we always come up against the same misconception: «After-tax fixed-income returns are barely above the CPI«. This distorted view of fixed-income investments leads them to take risks across the board.
Large investors are already familiar with ways of investing in fixed-income securities that offer very attractive levels of return and growth, whilst exempt from tax efficiently manage their assets in a wide variety of ways. They therefore have a very clear understanding of the difference between risk and security in their assets. But small and medium-sized investors continue to resign themselves to what they believe is the only profitable alternative to property investment, even though it is dangerously volatile – namely, the stock markets themselves or, in some cases, derivatives of these.
As we have explained on other occasions, there are safe alternatives for all types of customer. For this reason, it is very important that, above all, the medium-sized investors (and, of course, the big ones) understand that they should not risk the bulk of their wealth on equities in order to grow it. The risk no This must be taken as a given in any investment. Obviously, there is always a minimal risk that our entire economic system could go down the drain if a war or a sudden global crisis were to strike, and in such a scenario, not even fixed-income investments would likely survive, and of course no one would pay for our properties either. But barring such a situation, our investments must be safeguarded, and we must make a very clear distinction between assets that can be exposed to risk and those that cannot.
As we were saying, this confusion has led many investors to surprise us with comments such as: «My fixed income comes from property rentals and the steady rise in property values. I therefore need to invest my cash in the stock market to achieve a good return.». Come on! Rents aren’t fixed, and property values don’t go up in eternum, I can assure you of that. Naturally, as these average investors begin to appreciate the appeal of high-security, high-yield fixed-income investments, their thinking becomes clearer and they start to take fewer risks. But I must admit that we find it much harder to persuade them to offload their property holdings in favour of cash, because they continue to place their trust blindly …that their properties will be worth more and more and more and more every day… What a short memory. And I’ll never tire of repeating it: These are times for cash.
I must also say that for very small portfolios – and particularly when the owners are young – investments in equities are not only advisable but, I would even go so far as to say, essential. Growing your wealth at a rate of 8% in fixed-income investments with just a few thousand euros and your whole life ahead of you is little short of a death sentence. Whereas for someone of middle age with hundreds of thousands of euros, growing at that rate becomes almost a necessity. And in all the cases mentioned, another variable must be taken into account: the ability to generate savings from our employment, but we’ll discuss that in another post.
To sum up, what strikes me as significant is the widespread underestimation of the risks associated with equity markets amongst average investors, and the tendency to treat property investment as if it were a fixed-income investment. We’re not on the right track.

Every day, more and more pension schemes based on equities are being set up. It is very common to find financial advisers who recommend investing in the stock market to provide for our retirement (sic). Some even state loud and clear that «only the parquet »are capable of consistently outperforming inflation’, a statement made by the managing partner of Abante Advisers or articles such as the one published last week in Five Days. The inherent risk is of little consequence, as is the fact that the variable yields 18%, Keep it coming – it’s war!

It seems obvious that we should put our future survival at risk senile in the stock market, so as to maintain our purchasing power and support the State throughout our lives. But Let’s stop Let’s analyse this situation a little. We have been building up capital through saving over decades, to ensure we can enjoy a dignified old age and retirement, without relying on the unlikely prospect of state support in the form of a pension. So far, so reasonable. But it turns out that most «experts» advise us to invest it in the stock market because this is the only way to beat inflation in the long term after tax. In other words: risk and higher taxation on profits. What a curious way to beat the purchasing power and tax advantages offered by pension schemes! Ah, I’d forgotten that we’ll also be paying substantial commissions to our advisers along the way. If we agree on a success fee, it’s true that we’ll only pay out if there’s a happy ending, but if the story ends badly, we won’t care much about having saved a few commission points. Is it to boost their commissions that most advisers suggest linking retirement savings to equities? In some cases, yes. But in others, it may simply be down to incompetence.
It is true that we will always have the option of selling the knotted our home, as our friend so aptly explains Echevarri, even if it is to the detriment of potential heirs. But it wouldn’t be long before the «expert financial advisers» proposed another investment in RV to make the best use of our resources in old age, putting Let’s make the most of this new and substantial influx of money into our (your) pockets.In short, by gambling our future away on the markets, we may end up old, possibly ill and poor, albeit with an impeccable track record as loyal contributors to the state coffers and to those of our financial advisers. Of course, one day someone might say that they chose appropriately by investing his future in the stock market, if the markets have treated him well right up until the end of his days. But, if I may say so: «When you see the balls, it’s definitely a bull».
A pension scheme should, in essence, be a guaranteed accumulation of capital in fixed-income investments, but one that clearly offsets the loss of purchasing power. One option I consider less suitable is fixed-income funds High Yield or emerging market debt, because it carries a risk that is by no means negligible. Even so, with careful selection, it would be a viable long-term alternative to the risk on the stock market. My preferred option for the past couple of years has been sophisticated fixed-income investments: that is to say, funds comprising bonds, debentures and preference shares, which pay out dividends and have leverage up to 300% and ratings Type A approximations. In other tickets I’ve already told you about them.
Please, Do not confuse the leverage fixed-income investments with equity investments. Fernando Calatayud gives us, as always, a masterclass regarding the risks associated with these leverage in a variable.
I have attached the original script for the farewell letter the one Fernando is referring to. Awe-inspiring, but don’t miss the rest of the comments. And here’s also a light-hearted take on the world of variables from the interesting Company Blog.
I find it even more disgraceful that renowned financial advisers recommend investing one’s retirement savings in share schemes. Whether this is due to a thirst for commission or to incompetence and a lack of knowledge regarding more imaginative forms of low-risk, high-yield fixed-income investments. It doesn’t matter; in any case, they are gambling with the future of many families who, unlike the cases mentioned in that anonymous letter, may find themselves ruined when their age no longer allows them to react. But they will prefer the commissions and praise from those who know it’s a bull market only after the fact…

As part of our day-to-day work, last week we negotiated the possible purchase of a plot of land for development (let’s say between Seville y Albacete…) a very substantial sum: €58 million. The negotiations centred on the interest payable on the 50% for the payment deferred over three years. So far, so normal, and the preliminary contacts were made through the intermediary on duty – an old acquaintance of ours and an expert professional who, if you’re not careful, will sell you the Palace of Versailles as chateau for the summer, with a discount for early payment. But we insisted on dealing directly with the sole owner, whom we had not yet met: a middle-aged man with a rustic, prudent air about him. However, when we got down to business, he told us very seriously that the deferred payment of 29 million € had to be paid with «»the same interest rate as the bank, plus one olivo’. I must admit that although I have fought bulls in many arenas (I’d say almost all of them), it took me a few seconds to react. It wasn’t irony or a joke, nor even a metaphor. I found it hard to believe that someone who confuses the Euro interbank offered rate With the oil-related profits, plus one unit of something I don’t even want to imagine, he’s set to become the owner of €58 million any day now: €29 million of that in cash and the rest over three years with the corresponding interest… very interesting Olivos plus one. Both comical and alarming, although many of us envy him from our modest background.

What will become of this man and his family in a few years« time? Based on our experience as wealth advisers, I do not believe they will be any happier than they are today. They will be manipulated, robbed, swindled, flattered and squandered in the broadest sense of the word. They will be at the mercy of everyone around them, whether they are part of the family or not. Mutual animosities, fuelled by their limited education, may well end tragically. The best thing that could have happened to them would have been to sell land worth no more than a couple of million euros. That way, they would have savoured the sweet taste of abundance, but within a few years everything would have returned to »normal’ – at most, leaving a few residual properties that their children could make use of.
I wish you all the best for the future, but paradoxically Life isn’t going to be easy for them from now on, unless I just steal a honest a law firm that sympathises with their limitations and cuts them off from their fortune in exchange for the «business» of their lives. To end up in a family office, even if it were the worst in Spain, it would be like winning the ‘Primitiva’ jackpot for a second time, but unfortunately the chances of that are virtually nil (unless we bring it on ourselves…).
As for our economic system, I have to say that I consider it an aberration that, overnight, a farming family should find their land – which has been used to feed comfortably to their ancestors, in the face of such a turn of events for which no one has ever prepared them. Perhaps it is an aberration comparable to that which the buyers of the homes to be built on this land will have to endure, with mortgages that their children will inherit if the properties are not repossessed.
In the case of the farmer, it seems to me to be a wealth creation contrary to every law of the capitalist economy. And amongst the buyers of those flats, a the creation of poverty, interestingly enough, the same interest: Olivo plus one.

On one occasion, a well-known F1 driver (who was still a test driver at the time) told me that it was utterly stupid to go to such lengths to protect the teams’ technical advances, as by the time they were officially implemented, the competition would have copied them in less than a week. In other words, the result of months of extremely costly research was within the competitors’ reach in a matter of days. I asked him whether it was worth all that financial and technical effort for such a small advantage over the rest, and how frustrating it must be for the whole team to see the team next door catch up simply by copying them. But his reply was It was a real lesson that we have applied ever since in our work as financial advisers:

«If you are the innovator rather than the imitator, your real advantage is far greater than the time it takes for others to copy your advances.»

A pithy statement if ever there was one. Indeed, when others apply something we have created, they are still a long way from catching up with us, since our know-how will be far beyond that. Or at least that is how it should be. Furthermore, the implementation of any protocol or advancement in a system will always be far more efficient and refined when carried out by its creator than by trained third parties.
At that moment, as family office We came to the conclusion that we could offer our entire range without any hesitation know-how to manage people’s wealth in the broadest sense. And that is what we did. As pioneers in many aspects of asset analysis, planning and management, we decided to to liberate our source code. Inevitably, some of our competitors copied some of our services; others even improved on them in certain respects (¡well (thanks to them!), but without a doubt those who benefit most were and are Customers. And that is what truly This should be a priority for any business. A business organisation with customers who are happy and grateful that they have been taught how to manage their wealth – by offering them our «source code» in an educational manner tailored to their profile – is sure to reap business benefits.
At first glance, it might seem that a client who is taught how to be self-sufficient and manage their financial affairs, they will soon no longer be subject to our invoicing. The answer is: Probably yes. But that does not mean they will cease to be a revenue-generating customercrucial for the company. When we talk about the economic sector and, above all, about counselling and comprehensive advice, the synergies between the client and family office are, and should be, almost infinite. Therefore, by gradually blurring the line between client and friend over time, we undoubtedly generate financial benefits for our company that are often far greater than the reduced or lost turnover itself. What is more, even in the worst-case scenario, where, having helped a client to become self-sufficient As far as wealth management expertise is concerned, even if we lose their business and it doesn’t generate any synergy with our company, we’ll still gain a grateful friend. If that’s the worst-case scenario, at this stage of the game, so be it.
This reminds me of the difference between a senior executive who simply gives orders and a leader. A comprehensive wealth management firm may «lead the way» in terms of assets under management and clients advised, but another with a lower volume will lead the sector. That is a qualitative difference that is impossible to replicate, given that this elite The role of businesses is to innovate, create and constantly improve. To quote one of my Gurus favourites: «A business can get better or worse, but it can never just stay the same.» So the choice is clear; if, on top of that, you are the creator or founder of the venture, all that’s left to do is «get out into the field and enjoy it», as he said Johan Cruyff.
Getting back to my conversation with the F1 driver, he also made a confession to me that gave What to think: «We even try out techniques and technical solutions that are prohibited by the FIA«. My naivety got the better of me, and he then replied: «In case they are authorised at some point, so that they can be implemented immediately… or in case it is decided, on an ad hoc basis, to take the risk of using them sooner.» A statement that is not quite so categorical, but which is also perfectly applicable to our work as Family Office. That’s right.